Detroit has amongst the highest foreclosure rates (16%) in the country. This means a large number of homes are involved in foreclosures in Detroit. While some of these are homes that have been foreclosed upon by the government (HUD foreclosures), a majority are homes that have been foreclosed upon by lenders/banks.
A bank would foreclose on a house when the home owner is unable to make the mortgage payments on time. The home owner is given some time to try and cure the default in question before the home is put up for sale at a public auction. A home that does not sell at the auction is transferred to the lender who held the primary loan on the home before it was foreclosed upon.
Once the title of the property is transferred to the lender, the home becomes a Real Estate Owned property. Also commonly referred to as REO homes, discounts have traditionally been associated with buying these homes.
Banks are normally in a hurry to sell foreclosed homes. This is primarily because of the significant amount of time and money that goes into maintaining these homes. This results in banks selling foreclosed homes for considerably lesser than their valued market prices.
Banks also generally take care of unpaid property taxes and any other liens linked to the property after the properties become part of their inventories. This makes buying foreclosure homes from banks a fairly safe bet.
In instances when the listing price of an REO foreclosure is lower than its market values, there are increased chances of multiple offers being placed. Making an offer of the listing price in these situations would almost definitely be without result. In cases of multiple offers the house usually goes to the highest offer, however, this is a decision the lender makes.
Looking for REO foreclosure homes is quite easy. Approaching all the lenders/banks you know is a good start. Almost all financial institutions which deal in home loans will have foreclosed homes on their books, and they would be more than willing to pass this information to you.
The internet can help you look for REO foreclosure homes in Detroit from the comfort of your home. Banks/lenders are known to have foreclosure listings on their web sites. Besides, there are a large number of foreclosure listing web-sites that offer area specific searches.
Many banks are known to sell their foreclosed homes through real estate agents. Real estate agents are often very good sources for scouting local foreclosure homes.
No matter which process you choose to look for a house, make sure you go through all possible resources before you make your final decision.
